Suppose that the demand function for Japanese cars in the United States is such that annual sales of cars (in thousands of cars) will be 250-2P, where P is the price of Japanese cars in thousands of dollars.
Suppose that instead of imposing an import duty, the U.S. government persuades the Japanese government to impose \voluntary export restrictions" on their exports of cars to the United States. Suppose that the Japanese agree to restrain their exports by requiring that every car exported to the United States must have an export license. Suppose further that the Japanese government agrees to issue only 236,000 export licenses and sells these licenses to the Japanese firms. If the Japanese firms know the American demand curve and if they know that only 236,000 Japanese cars will be sold in America, how much will a Japanese firm be willing to pay the Japanese govern- ment for an export license?(Hint: Think about what it costs to produce a car and how much it can be sold for if you have an export license.)
how much profit he will that much amount he will be willing to pay
On 21 April 2015 at 05:11, tanudas [via Discussion forum] <[hidden email]> wrote:
Suppose that the demand function for Japanese cars in the United States is such that annual sales of cars (in thousands of cars) will be 250-2P, where P is the price of Japanese cars in thousands of dollars.
Suppose that instead of imposing an import duty, the U.S. government persuades the Japanese government to impose \voluntary export restrictions" on their exports of cars to the United States. Suppose that the Japanese agree to restrain their exports by requiring that every car exported to the United States must have an export license. Suppose further that the Japanese government agrees to issue only 236,000 export licenses and sells these licenses to the Japanese firms. If the Japanese firms know the American demand curve and if they know that only 236,000 Japanese cars will be sold in America, how much will a Japanese firm be willing to pay the Japanese govern- ment for an export license?(Hint: Think about what it costs to produce a car and how much it can be sold for if you have an export license.)
I don't know how to appraoch this. Please help!
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Bhai , monopoly hai ye , when Ronald Regan was president of us tab ,Isi cheez ki vajah se us automobile sec mai slump aaya tha , any ways difference between monopoly price and average cost is the tax that Japanese producer can pay
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